Pension health in Montana
 in Montana |
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| Montana pension health[1] | |
| Liability (2015) (in millions): $13,562 | |
| Debt (2015) (in millions): $3,456 | |
| Funded ratio (2015): 75% | |
| Percentage paid (2015): 110% | |
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| Note: This page utilizes information from a variety of sources. The information presented on this page reflects the most recent data available as of August 2017. | |
Pension health is a term used to describe the fiscal condition of a pension system. It can be difficult to gauge pension health in each state; studies use a variety of calculations to determine a pension system's average liabilities, unfunded liabilities, funded ratio, and other metrics. The information on this page comes from two reports by two separate organizations: the Pew Charitable Trusts and the Hoover Institution.
Pew report
According to a 2017 report by the Pew Charitable Trusts, “[t]he gap between the total assets reported by state pension systems across the United States and the benefits promised to workers, now reported as the net pension liability, reached $1.1 trillion in fiscal year 2015, the most recent year for which complete data are available. That represents an increase of $157 billion, or 17 percent, from 2014.”[2] The table below provides information about pension plan liabilities and debt, funded ratios, and net amortization. According to the Pew Charitable Trusts, "Net amortization measures whether total contributions to a public retirement system would have been sufficient to reduce unfunded liabilities if all expectations had been met for that year." This metric comprises two parts: an employer contribution benchmark, which is the amount the employer needed to contribute to the plan in a year in order to reduce pension debt, and the percentage of that amount that was actually paid. A positive net amortization percentage (i.e., one exceeding 100 percent) indicates that plans could expect to see a reduction in their debt. In 2015, according to Pew, 32 states saw positive net amortization percentages.
The table below provides information on pension health metrics for Montana. Information from surrounding states is provided for comparative purposes. All dollar amounts displayed below should be multiplied by 1,000,000 (e.g., $240,000 is equal to $240,000,000,000).
| Pension health metrics from the Pew Charitable Trusts report, fiscal years 2012-2015 (dollars in millions) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| State | 2015 | Funded ratio | Net amortization | ||||||
| Liability | Pension debt | 2012 | 2013 | 2014 | 2015 | Employer benchmark | Percent paid | ||
| Montana | $13,562 | $3,456 | 64% | 73% | 76% | 75% | $305 | 110% | |
| Idaho | $15,669 | $1,283 | 85% | 86% | 95% | 92% | $219 | 159% | |
| North Dakota | $6,646 | $1,969 | 63% | 61% | 73% | 70% | $150 | 111% | |
| Wyoming | $10,147 | $2,731 | 80% | 79% | 79% | 73% | $229 | 76% | |
| Totals in the U.S. | $3,850,168 | $1,091,828 | 72% | 72% | 75% | 72% | $102,949 | 92% | |
| Source: The Pew Charitable Trusts, "The State Pension Funding Gap: 2015," accessed August 21, 2017 | |||||||||
Hoover Institution report
- See also: Hoover Institution pensions study, 2017
According to a report by the Hoover Institution released on May 15, 2017, "the vast majority of state and local governments continue to understate their pension costs and liabilities by relying on investment return assumptions of 7-8 percent per year." The report stated that, as of fiscal year 2015, the total unfunded liabilities of state and local pension systems totaled $3.846 trillion. The report distinguished between stated unfunded liabilities according to state governments and the market value of those liabilities; the Hoover Institution calculates market value by taking into account the ongoing interest costs and service costs of the plans, which include changes in payments year to year. According to the report, this represented "2.8 times more than the value reflected in government disclosures." The report also stated that, in all states except Alaska, there were large differences between the amount of a state's revenue that must have been contributed to pension funds to prevent unfunded liabilities under the Hoover Institution's expected return rate and the amount actually contributed. The table below provides information from the Hoover Institution report for Montana. Information for surrounding states is provided for comparative purposes.[3]
| Pension health metrics from the Hoover Institution report, fiscal year 2015 (dollars in thousands) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| State | Unfunded liability | Percent of revenue | |||||||
| Stated | Market Value | Contributed | Required to prevent rise in unfunded liabilities (expected return) | Required to prevent rise in unfunded liabilities (market value) | |||||
| Montana | $3,466,428 | $9,939,681 | 5.4% | 4.9% | 11.2% | ||||
| Idaho | $1,283,211 | $8,321,136 | 3.9% | 2.8% | 9.2% | ||||
| North Dakota | $1,969,135 | $5,763,351 | 1.7% | 1.8% | 4.4% | ||||
| Wyoming | $2,730,654 | $7,385,737 | 2.6% | 3.3% | 9.0% | ||||
| Source: Hoover Institution, "Hidden Debt, Hidden Deficits: 2017 Edition," May 15, 2017 | |||||||||
Recent news
This section links to a Google news search for the term "Montana + public + pensions"
See also
- Public pensions in Montana
- Public pensions in the United States
- Historical Montana pension information
- Montana state budget and finances
- Tax policy in Montana
- Pension statistics
- Public pension health by state
- Public pensions
External links
Footnotes
- ↑ Note: The figures in the box reflect the figures reported by the Pew Charitible Trusts.
- ↑ The Pew Charitable Trusts, "The State Pension Funding Gap: 2015," accessed August 21, 2017
- ↑ Hoover Institution, "Hidden Debt, Hidden Deficits: 2017 Edition," May 15, 2017
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